Ethereum's Performance Dampened by FUD Surge

Recent concerns over Ethereum's security status have triggered an influx of FUD, leading to its underperformance relative to Bitcoin and the S&P 500. Despite these fears, holders remain steadfast, with record-breaking ETH inflows into centralized exchanges.

Is Ethereum's Lackluster Performance Driven by FUD?

Data suggests that a recent surge in fear, uncertainty, and doubt (FUD) surrounding Ethereum's potential security status has contributed to its underwhelming performance. However, steadfast holders remain unfazed, showing little inclination to sell off their holdings.

CEX Inflows Hit Record Highs Amidst FUD

Over the past week, Ethereum's supply has exhibited mixed trends. As the fervor for meme coins wanes, Ethereum's fees have plummeted by 41%, according to blockchain data provider IntoTheBlock.

In its latest newsletter, IntoTheBlock delves into the recent FUD targeting Ethereum, assessing its impact on price, fundamentals, and the optimistic outlook shared by long-term investors.

Ether has also experienced its largest weekly net inflows into centralized exchanges (CEXes) since September 2022, with anxious holders transferring $720 million to these platforms.

Regulatory Concerns Cast a Shadow

In addition to persistent rumors about Ethereum's security status, some media outlets have reported that the Ethereum Foundation is under investigation by law enforcement.

If Ethereum were deemed a security in the United States, the prospects for Ethereum ETF approval could be jeopardized.

ETH Underperforms Amidst BTC Rally

IntoTheBlock attributes Ethereum's underperformance to the FUD. Despite Bitcoin's impressive rally, Ethereum has lagged behind both Bitcoin and, on a risk-adjusted basis, the S&P 500.

The ETHBTC ratio remains just above 0.05, approaching its lowest level since June 2022. Notably, Bitcoin has surpassed its 2021 high, while Ethereum's surge has fallen 32% short of its all-time high.

Long-Term Holders Stand Firm

Despite the negative headlines, long-term ETH holders have shown no signs of capitulation. The number of Ethers held in wallets for over a year continues to reach new highs.

Will FUD Continue to Haunt Ethereum?

It remains to be seen whether the FUD surrounding Ethereum will persist and continue to weigh on its performance. However, the resilience of long-term holders suggests that the underlying fundamentals of the platform remain strong.